Consumer and Provider Cost

We are always trying to get more while giving or paying less; it’s the complex of doing more with less. This is the best business model for increasing profits while reducing the burden on the company. Now that company is our health care industry and insurance companies are finding more ways to trim the fat, as one would say, and reduce their expenses, while maintaining the status quo of customer satisfaction.

The challenge of controlling/reducing the cost spent on healthcare and not affecting the quality, is at the forefront our world. America currently spends a quarter of the entire budget on healthcare cost (“Options for Reducing the Deficit: 2017 to 2026”, 2016). To accomplish this, health insurance companies have sought to bring consumer/patients into a more active role in the managing of their health care services, helping them become more aware of the options as they acquire health services. This began with the “patient led National Health Service (NHS)”, which provided a wed based system that aid s patients with decisions on treatment options, to curve the amount of procedures and the find alternative methods of treatment (Gupta, 2015). Other methods have been employed to create consumer awareness, like cost sharing and high deductible (HDHP) or consumer-directed health plans (CDHP). Private insurance companies believe that if a patient must pay for services each time or until they reach a certain amount, that would reduce the likely hood of abuse and overuse of medical services. The cost-sharing is thought to make patients become “consumerist” meaning they make better health choices because they consider things like cost and quality when seeking medical care. That quality means providers that will not waste time with multiple visit and patient satisfaction is of important because of the patient performance feedback (Gupta, 2015).

This approach to health care is why the debate over whether we use us patients or consumes of health care, because consumers pay for health services over those in managed-care or fee-for-services system (Pearl, 2015). The idea is, those that pay for what they receive, will choose better care/services and access that care only when necessary. State and Federal funded health programs will continue to be pleaded with over use, because the patients of those systems either have no other option for care or have not been made aware that there are alternatives to consider. The option 6 to reduce the deficit proposed in the CBO (Congressional Budget Office), was to “Introduce a Minimum Out of Pocket Requirement Under Tricare for Life” (“Options for Reducing the Deficit: 2017 to 2026”, 2016). The rationale behind this was, if the recipients of (TLF) paid when they accessed care, then they would become better managers of their health and healthcare needs; this would reduce the overuse of medical services.

According to research done by Health Economics, “health insurance has the risk of sharing and a morale hazard”, is it worth causing people to negate needed medical services because they can’t afford their co-pays, all to save the company money (Boes, 2016). Providing full insurance, like many federal and state plan, greatly increases the demand of health care; however, when consumers must pay for health care services that demands is reduced. The hope is, those patients that do pay for health care are still getting needed medical treatments, and the patients with fully funded health care, have taken a more active role with lifestyle changes to reduce the need for medical care.


References:

Boes, S., & Gerfin, M. (2016). Does Full Insurance Increase the Demand for Health Care?. Health Economics, 25(11), 1483-1496.


Gupta, N., & Polsky, D. (2015). High deductible health plans: does cost sharing stimulate increased consumer sophistication?. Health Expectations, 18(3), 335-343. doi:10.1111/hex.12031


Options for Reducing the Deficit: 2017 to 2026. (2016, December). CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE, 2016(), 279-280. Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf


Pearl, Robert. (2015). Are You A Patient or A Healthcare Consumer? Retrieved from

https://www.forbes.com